by Peter Reagan, Birch Gold Group:
What’s going on with housing? Home sales plunge to a record low – record high prices in many parts of the nation, combined with steep mortgage rates have led to a standoff between buyers and sellers. How much is a home really worth if no one can buy it?
Today there is corporate media spin that the overall rate of inflation is “easing” for everything in the CPI basket of goods.
If that’s all you pay attention to, then you might think the inflation problem has finally been resolved for now.
But then reality presents itself (as it normally does) once you leave the world of corporate clickbait and 5-minute sound bites following one to two news cycles.
TRUTH LIVES on at https://sgtreport.tv/
Don’t get me wrong, though. It is good news that the rate of consumer price inflation is finally easing after almost four grueling years of price increases on many consumer necessities, a trend that started in 2021 shortly after President Biden took office.
Looks like the rate of price inflation on a year-over-year basis is easing slowly. Yes, that’s good news! Any slowdown in the destruction of our purchasing power is certainly welcome.
In the chart below, the blue line represents the annual inflation rate – which peaked at 9% in June 2022 and has slowly declined since:
…but that’s where the good news about inflation ends
What you won’t hear on virtually any mainstream media reports or financial news channels is that inflation is cumulative. That purchasing power, once gone, is gone forever – even if inflation returns to the Fed’s target 2%.
The red line on the chart above tracks the total effects of inflation over the last three-and-a-half years. The cumulative purchasing power destruction since Biden’s inauguration? 19.4%
(We’ve reported on this Presidential Inflation Rate previously.)
This concept bears repeating: Inflation is cumulative. Lower annual inflation rates do not return our purchasing power!
If your total net worth hasn’t increased at least 19.4% over the last 43 months, you’re worse off. That’s not a political statement – it’s just simple mathematics.
And it’s simple mathematics based on the official numbers.
Are the official numbers correct? Probably not – Ron Paul calls them “just plain nonsense” for example. Ways of measuring inflation have changed repeatedly over the years for political reasons. Regardless, no matter what Paul Krugman says, most of us are noticeably worse off.
Except in one way.
